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On The Intersection Of Antitrust Enforcement And Corruption


Recently Roger Alford (Deputy Assistant Attorney General of the DOJ’s Antitrust Division – who until recently was a law professor at Notre Dame) delivered this speech regarding the intersection of antitrust enforcement and corruption.

Prior to highlighting the speech, this post further explores the intersection by: documenting how Congress – in enacting the FCPA – considered whether the antitrust laws adequately captured the so-called foreign corporate payments at issue; and highlighting FCPA enforcement actions which also included antitrust charges.

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Friday Roundup

Enforcement agency speeches, “foreign official” delay, and for reading stack.  It’s all here in the Friday roundup.

Enforcement Agency Speeches

This prior post detailed comments by Mary Jo White prior to becoming SEC Chairman.

Last week, White spoke before the Investment Company Institute on the general topic of the SEC’s role in an increasingly global financial and regulatory system.  She stated as follows (see here) concerning the SEC’s enforcement of the FCPA.

“Of course, misrepresentations and other unlawful actions travel in both directions across borders, which is another reason why our partnership with our regulatory counterparts abroad is so important.  Among the most prominent concerns in this regard is bribery by U.S. companies overseas, which not only undermines international markets and governments but also simultaneously undermines the reporting and disclosure integrity of our own markets.  Thus, strong and fair enforcement of the Foreign Corrupt Practices Act, which forbids U.S. companies from bribing foreign officials, has been and will continue to be a priority for us. Our first objective is to help companies avoid FCPA violations by educating them. And so our staff along with our colleagues at the Department of Justice recently published a comprehensive Guide to the FCPA to give clear guidance and clear up some myths.  Of course, the other side of education is deterrence.  Deterrence can mean strong enforcement actions with tough disgorgement and penalties.  But it can also mean the tangible benefits that come with cooperation – as demonstrated by the Non-Prosecution Agreement with Ralph Lauren Corporation we announced in April. In this particular case, the corporation’s Argentine subsidiary paid bribes to government and customs officials to improperly secure the importation of their products into the country.  The bribes occurred during a period when the U.S. parent company lacked meaningful anti-corruption compliance and control mechanisms over its foreign subsidiary.  The misconduct came to light as a result of the company’s efforts to improve internal controls and compliance.  And the company immediately reported the problem to the SEC and provided exceptional assistance to our investigation. Successful FCPA cases also increasingly require assistance from foreign law enforcement authorities.  That is why we recently partnered with the DOJ and FBI in conducting a foreign bribery training program that provided intensive training to 130 foreign investigators and prosecutors from 30 countries, many on which the SEC staff relies for mutual legal assistance in FCPA cases.”

Yesterday, Daniel Suleiman (DOJ Deputy Chief of Staff for the Criminal Division) spoke at the Minnesota Bar Association’s Annual International Business Law Institute.  (See here).  Suleiman offered “some views from the U.S. Department of Justice on the topic of anti-corruption enforcement” and “what the Justice Department is doing in the area of criminal enforcement to fight corruption at home and abroad.”  He stated, in pertinent part, as follows.

“I think of our anti-corruption efforts as falling into three principal buckets:  number one is criminal prosecution; number two is assisting foreign countries to build up their judicial, prosecutorial, and investigative institutions; and number three is the pursuit, through civil actions, of the proceeds of foreign official corruption.  I will discuss each of these buckets in turn.

First and foremost, the Criminal Division is a litigating operation.  We investigate and prosecute cases.  Our corruption prosecutions are of two kinds:  we prosecute corruption by domestic officials, and we prosecute foreign bribery offenses under the Foreign Corrupt Practices Act, or FCPA.”


“[W]e have an incredibly strong team of prosecutors who focus exclusively on enforcing the FCPA.  Depending upon how familiar you are with FCPA enforcement, you may know that the Criminal Division is the entity in the United States with primary responsibility for criminal enforcement of the Act.  It is Justice Department policy that no FCPA prosecution can be brought without authorization from the Criminal Division, which distinguishes FCPA prosecutions from most other kinds of federal criminal cases.  The Securities and Exchange Commission, which is a few blocks up the street from us, has primary responsibility for the Act’s civil enforcement.”

“Foreign bribery enforcement has for a long time been an important aspect of U.S. policy.  The FCPA was enacted roughly 35 years ago, around the same time that our Public Integrity Section was created to focus on public corruption prosecutions, and it was the first effort of any nation to specifically criminalize the act of bribing foreign officials.  The statute was enacted in the wake of the Watergate scandal, but it took more than 20 years for the Act to become a strong enforcement tool.  And, over the past several years, the Justice Department has substantially increased its enforcement of the Act.”

“One important aspect of our FCPA enforcement involves, of course, our corporate resolutions.  We have collected billions of dollars in criminal fines and penalties to resolve FCPA investigations against companies doing business abroad, including BizJet International Sales and Support Inc., a Lufthansa subsidiary; Alcatel-Lucent; Johnson & Johnson; and many others.”

“But another, critically important aspect of our enforcement regime involves holding individuals responsible for FCPA offenses.  There is no greater deterrent to corporate crime than the prospect of prison time.  As many have recognized, if people don’t go to prison, then enforcement can come to be seen as merely the cost of doing business.  In the past four years, the Criminal Division’s FCPA Unit has obtained over three dozen criminal convictions of individuals, including of people who have been sentenced to as many as 15 years in prison.”

“We are as active today in this area as we have ever been.  In the past month alone, we have announced charges against several key defendants in ongoing, active FCPA investigations.  In mid-April, in a case that we are prosecuting with the U.S. Attorney’s Office in Manhattan, we secured the arrest of a defendant in connection with an alleged bribery scheme to secure mining rights in the Republic of Guinea.  In a separate case, which we are prosecuting with the U.S. Attorney’s Office in Connecticut, we also secured the arrest last month of a defendant in connection with an alleged bribery scheme to secure power contracts in Indonesia.  And just two days ago, together with the U.S. Attorney’s Office in Manhattan, we announced charges against two broker-dealer employees and a senior Venezuelan banking official for engaging in a multi-million dollar bribery scheme.”


“Finally, I want to tell you about a relatively new Justice Department initiative.  About three-and-a-half years ago, Attorney General Holder gave a speech in Qatar, at which he pledged to increase the United States’ commitment to recovering foreign corruption proceeds.  Since that time, the Criminal Division has led the charge in developing what we refer to as the Kleptocracy Asset Recovery Initiative.”

“The initiative’s purpose is to identify the proceeds of foreign official corruption – in other words, the spoils – forfeit them through civil actions, and, to the extent possible, repatriate the forfeited funds for the benefit of the people harmed. In most criminal prosecutions, a court can order forfeiture, upon conviction, as part of the defendant’s sentence.  Often, however, it may be impractical or impossible to bring a criminal prosecution against a particular person – because that person is immune from prosecution, for example, beyond our jurisdiction, or otherwise unavailable.  In these circumstances, we have begun bringing civil forfeiture actions to recover the stolen property.”

“We have brought several Kleptocracy cases in the past couple of years, and forfeited millions of dollars in corrupt proceeds.  The most high-profile of our Kleptocracy cases to date involves two civil actions we have brought against approximately $70 million in assets allegedly belonging to a government minister in Equatorial Guinea who is also the son of that country’s president.  According to court papers, despite an official government salary of less than $100,000 per year, this minister amassed wealth of over $100 million.  Among the items we are seeking to forfeit are nearly $2 million worth of Michael Jackson memorabilia (including the white glove), a Gulfstream G-V jet worth $38.5 million, and a $30 million house in Malibu.  These are hard, and hard-fought, cases, but we believe strongly that foreign officials who amass wealth through corruption should not be permitted to use the United States as a haven for their ill-gotten gains.”

“Foreign Official” Delay

Oral argument in the “foreign official” challenge pending in the 11th Circuit – originally scheduled for later this month, has been postponed until the week of October 7th.

This is a historic appeal in that it will be the first instance in which a circuit court directly confronts the enforcement theory that employees of alleged state-owned or state-controlled entities are “foreign officials” under the FCPA (see here for a prior post, including embedded links).

Scrutiny Alerts

For more on Barclay’s scrutiny, on both sides of the Atlantic, see this recent article in Middle East Monitor concerning the bank’s relationship with the Abu Dhabi government, including Sheikh Mansour, the deputy prime minister of the United Arab Emirates.

Samuel Rubenfeld (Wall Street Journal Risk & Compliance Journal) has the latest (here) regarding BSG Resources Ltd. a Guernsey-based company in the news after Frederic Cilins, a French citizen associated with the company, was recently arrested and accused of attempting to obstruct an ongoing investigation into whether a mining company paid bribes to win lucrative mining rights in the Republic of Guinea.  (See here for the prior post).  As noted in the WSJ article, BSG recently released this detailed statement concerning its conduct in Guinea.

Reading Stack

Several articles of interest to pass along from last week’s Corporate Crime Reporter conferenceThis article details comments made by Denis McInerney (DOJ Criminal Division Deputy Assistant Attorney General) regarding non-prosecution and deferred prosecution agreements.  This article details comments made by McInerney concerning my suggested two-step reform plan (see here for the prior post) and also details McInerney’s response to my question concerning the definition of a declination.  Articles here and here concern corporate monitors.


Over the years, Bloomberg’s David Glovin has written some excellent articles concerning Viktor Kozney, Frederic Bourke, et al.  With Bourke soon to report to prison, Glovin pens another great article here.


This prior post discussed the NY Times recent “With Bags of Cash, CIA Seeks Influence in Afghanistan” story and how the story put our stark double standards in the headlines once again.  More recently, the NY Times reports (here) as follows. “[Afghan President] Karzai said he had called a meeting […] with the CIA’s Kabul station chief. “I told him because of all these rumors in the media, please do not cut all this money, because we really need it,” he said. “We want to continue this sort of assistance, and he promised that they are not going to cut this money.”  For more on the situation, including the views of others, see here from Alison Frankel’s On the Case column.


See here from Josh Goodman (an attorney at the Federal Trade Commission) titled “The Anti-Corruption and Antitrust Connection.”


A good weekend to all.

Friday Roundup

Yet another instance, save the date, scrutiny updates, on point, FCPA Inc. tidbit, and for the reading stack.  It’s all here in the Friday roundup.

Yet Another Instance

The instances are so numerous, they are hard to keep track of.  In the latest instance of an FCPA enforcement attorney joining a law firm to provide FCPA defense services, earlier this week Paul Hastings announced here as follows.

“Nathaniel Edmonds has joined the firm as a partner in the Global Compliance and Disputes practice, based in Washington, DC. Mr. Edmonds joins from the Department of Justice (DOJ), where he was an Assistant Chief of the Fraud Section, Foreign Corrupt Practices Act Unit in the Criminal Division. At the time of his hire, Mr. Edmonds was one of the longest-tenured FCPA prosecutors. […] In recent years, Mr. Edmonds was responsible for directly supervising up to half of the DOJ’s investigations into transnational bribery. He also drafted portions of the FCPA Resource Guide published in November 2012, which details the contours of the FCPA legal regime, the policy positions underlying the enforcement strategy, and the relevance of past enforcement positions taken by the DOJ and the SEC. During Mr. Edmonds’ tenure, the DOJ has investigated and resolved more cases against corporations and has charged, tried, and convicted more individuals under the FCPA than in any other similar period in history.”

This Blog of Legal Times article stated as follows.  “Edmonds said that FCPA investigations and enforcement has increased in recent years and that the practice would likely continue to be robust for attorneys.”

That Edmonds played a supervisory role, as a DOJ enforcement attorney, in helping create the current FCPA enforcement landscape is precisely the reason why I have long argued that it is in the public interest (recognizing the niched nature of both the DOJ and SEC FCPA units) that all FCPA enforcement attorneys should be prohibited, when leaving the government, from providing FCPA defense or compliance services for a five-year time period.  For additional reading see this piece I co-authored as well as this prior post among several others.

Indeed, Paul Hastings specifically touted in its release Edmonds’ “connections to U.S. government agencies.”

Save the Date

The Dow Jones Global Compliance Symposium is April 2-3 in Washington, D.C.

Last year, Christopher Matthews at Wall Street Journal Corruption Currents described (here) the panel I participated in as “an FCPA debate for the ages” – “for FCPA geeks, this was Ali v. Foreman and Frazier.  A battle royale.  A bloodbath.”

On April 2nd I will be participating in a panel titled “The FCPA:  Does It Need Further Clarifying” along with Paul McNulty (Baker & McKenzie and former Deputy Attorney General) and David Yawman (Senior Vice President & Chief Compliance and Ethics Officer, PepsiCo, Inc.).  The panel is being moderated by Joe Palazzolo of the Wall Street Journal.

Scrutiny Updates

BHP Billiton

As noted in this prior post, in April 2010 BHP Billiton announced it was under FCPA scrutiny.  Earlier this week, various media sources reported that BHP Billiton’s FCPA scrutiny has grown.  As summarized by this Reuters article.

“The U.S. government is investigating a possibility of corrupt practices by the world’s largest mining company, BHP Billiton, the company confirmed Wednesday after media reports about an inquiry into its sponsorship of the 2008 Beijing Olympics.  Fairfax Media in Australia reported that the U.S. Department of Justice and the Australian Federal Police were investigating allegations that BHP Billiton had provided inducements, hospitality and gifts to officials from China and other countries. The U.S. Justice Department told Fairfax, in response to a Freedom of Information Act request, that it was conducting “law enforcement proceedings” involving BHP Billiton, which supplied materials for the gold, silver and bronze medals used in Beijing. The Australian police confirmed that they had been working with their foreign counterparts and local regulators on Australian aspects of the U.S. investigation.  BHP Billiton said it had been cooperating with the “relevant authorities,” and in response to media queries it said it believed it had not broken any laws in its Olympics sponsorship. “BHP Billiton is fully committed to operating with integrity and the Group’s policies specifically prohibit engaging in bribery in all its forms,” the company said in an e-mailed statement.”


As noted in this prior post, Embraer previously disclosed it was under FCPA scrutiny.  Earlier this week, Embraer updated its disclosure and stated as follows.

We received a subpoena from the SEC in September, 2010, which inquired about certain operations concerning sales of aircraft abroad. In response to this SEC-issued subpoena and associated inquiries into the possibility of non-compliance with the U.S. Foreign Corrupt Practices Act, or FCPA, we retained outside counsel to conduct an internal investigation on transactions carried out in three specific countries.  Further, the Company has voluntarily expanded the scope of the internal investigation to include two additional countries and has reported on those matters. The investigation remains ongoing and we, through our outside counsel, continue to cooperate fully with the SEC and U.S. Department of Justice, which are the authorities responsible for reviewing the matter. The Company, with the support of our outside counsel, has concluded that it is still not possible to estimate the duration, scope or results of the internal investigation or government’s review. In the event that the authorities take action against us or the parties enter into an agreement to settle the matter, we may be required to pay substantial fines and/or to incur other sanctions. The Company, based upon the opinion of our outside counsel, believes that, there is no basis for estimating reserves or quantifying any possible contingency.”

On Point

Stuart Altman (Hogan Lovells, and a former Assistant U.S. Attorney in the E.D. of N.Y.) stated as follows in a recent Law360 Q&A.

“Q: What aspects of your practice area are in need of reform and why?

A: The inability of companies and individuals accused of wrongdoing to actually defend their selves. If you ask most white collar criminal defense lawyers they will tell you that they spend most of their time figuring out how to cooperate with the government not defend their clients. Investigations are ultimately focused on reporting to the government instead of building a defense. The government has made it incredibly onerous for a company to fight accusations of wrongdoing. The danger of huge fines, debarment and threats against individual employees all combine to create a huge disincentive to fight even when you believe your client is in the right. I think we need to find a better balance that allows the government to do its job but doesn’t create a climate of coerced surrender.”

William Burck (Quinn Emmanuel, and former Special Counsel and Deputy Counsel to President Bush a well as a former Assistant U.S. Attorney in the S.D. of N.Y.) stated as follows in a recent Law360 Q&A.

“Q: What aspects of your practice area are in need of reform and why?

A: Overcriminalization is a troubling trend in the U.S. Unfortunately, some of what is considered “white collar crime” is really the criminalization of questionable, but not truly fraudulent, business activities or the misuse of criminal process to resolve what should be civil disputes. True fraud and theft should be targeted, of course. No one thinks Bernie Madoff should be spared. But prosecutors sometimes twist poor or disfavored business practices into allegedly criminal misbehavior.”


This Washington Post article states as follows concerning future opportunities for Washington D.C. law firms.

“At most firms, mainstay Washington specialties such as antitrust, health care and intellectual property continued to help drive business. Cybersecurity and Foreign Corrupt Practices Act work — two booming areas for companies — are poised to bring in more legal work for years to come.”

This Am Law Daily article states as follows concerning New York-based law firms.

“Government investigations – especially the LIBOR antitrust investigations and Foreign Corrupt Practices Act and False Claims Act work – are keeping hundreds of fee-earners busy, and New York firms with strong litigation departments are particularly well positioned to benefit.”

For the Reading Stack

In “Policing The Firm,” Daniel Sokol (a leading antitrust authority at the University of Florida Levin College of Law) asks if criminal antitrust enforcement could learn from FCPA enforcement.  Sokol argues it can and he explores the lack of corporate monitors in antitrust actions and asks why antitrust remedies do not resemble remedies in other areas of corporate crime, with the routine imposition of monitors, such as the FCPA.

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